Camden, New Jersey-based Campbell Soup Company (CPB) is a global food and beverage manufacturer with a market cap of $14.8 billion. The company produces a variety of well-known brands, including Campbell's, Pepperidge Farm, and V8, across its Meals & Beverages and Snacks segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and CPB fits this criterion perfectly. CPB is renowned for its iconic red-and-white soup cans and its diverse portfolio of globally recognized food brands, which have become staples in the convenience food industry.
The packaged food company has seen a 6.3% decline from its 52-week high of $52.81, reached on Sep. 10. However, over the past three months, its shares have risen nearly 12%, outperforming the broader Dow Jones Industrials Average's ($DOWI) 7.2% gains during the same period.
Longer term, CPB is up 14.5% on a YTD basis, surpassing DOWI's 11.2% gains. But, shares of Campbell Soup have surged 17.9% over the past 52 weeks, lagging behind the Dow Jones’ 23.3% returns over the same time frame.
Yet, CPB has shown a bullish trend, consistently trading above its 50-day and 200-day moving averages since mid-April despite a few fluctuations.
Campbell Soup's underperformance over the past year is largely due to a combination of factors, including rising input costs from inflation, supply chain disruptions, and higher labor expenses. In addition, the company has faced increased competition in the packaged foods sector, which pressured volumes and pricing power while struggling to pass on cost increases to consumers.
Moreover, despite beating adjusted EPS expectations, the stock fell 1.8% on Aug. 29 due to the lower-than-expected Q4 revenue of $2.3 billion and annual profit forecast, driven by higher raw material costs and the recent sale of its Pop Secret popcorn business. Plus, a decline in organic sales in the snacks division further contributed to investor concerns.
But, CPB has significantly outperformed its rival, The Kraft Heinz Company (KHC), with KHC experiencing a 6.7% decline YTD and only a marginal gain over the past 52 weeks.
Despite that, analysts are cautious about CPB's prospects, given its underperformance compared to broader markets over the past year. With a consensus "Hold" rating from 16 analysts, the mean price target of $50.50 indicates a marginal premium to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
